An estimated 1,500 New Yorkers who found themselves victims of Superstorm Sandy in 2012, may now find themselves embroiled in another disaster as the state seeks to recover more than $59 million in disaster funds awarded to them to restore, repair and/or lift their houses.
According to the Governor’s Office of Storm Recovery debt letters are being sent to people who received money, but were later deemed ineligible for housing rehabilitation, or who received duplicate payments for the same work. Depending on the individual case, residents could owe the government anywhere between$4,500-$180,000 each. In the meantime, FEMA is also working to reclaim a portion of the nearly $1.4 billion in disaster relief funds paid to people in New York and New Jersey it believes was “improperly spent” in the aftermath of the storm As of January 7, the agency has been attempting to get back $15.8 million paid to 2,361 claimants in New York. It should be noted, that the collection actions by New York State and FEMA are not connected to each other.
New Yorkers who receive debt letters will have 60 days from the date of the notice to file a written appeal, and hardship waivers may be granted to those in need of payment plans, although the government would prefer bulk payments.
“Our goal is to give people as much opportunity as possible to justify those awards,” stated Daniel Greene, general counsel for the Storm Recovery Office.
He also noted that approximately 18,000 applications were made for housing assistance after Sandy, but 12,000 were deemed ineligible at the time, including people who had already received disaster money after Tropical Storm Irene the year before, and then did not get required flood insurance. Others include people who took money to repair or elevate their homes and then left the program.
“You can’t keep money you get for a specific purpose and then withdraw from it,” added Greene.
Others, who received duplicate payments, include applicants who used private insurance, got flood insurance payouts, received small business loans, or were given some sort of charitable aid.
Note: Once a debt goes past 120 days it can be forwarded to the IRS, which can assess interest of 28%-30% in some instances.